GB: CBI Distributive Trades

Thu Jan 29 05:00:00 CST 2015

Consensus Actual Previous
Level 30 39 61

Having hit a 26-year high in December, the CBI's measure of retail sales growth almost inevitably fell this month. At 39 percent, the balance of respondents reporting higher volumes than a year ago was above market expectations and historically very firm but with officials sales having fallen 1.8 percent on the month in January 2014, it may be misleadingly robust.

Sales for the time of year dropped 7 percentage points to 9 percent, still well above their levels in October and November (minus 10 percent and minus 2 percent respectively) but 4 percentage points short of the September print. Moreover, orders were down even more sharply, weighing in at just 2 percent after 24 percent in December.

Still, retailers are quite optimistic about prospects for February with their forecast sales index showing a 3 percentage point rise versus January's outturn to 42 percent. Overall the signs are that the consumer sector was in decent shape at the start of 2015 and if today's results are anything to go by, actual spending in January could again surprise on the upside following December's bonanza.

This survey was first introduced in 1983 and is an indicator of short-term trends in the UK retail and wholesale distribution sector. The quarterly and monthly surveys both cover volume of sales, orders on suppliers, sales for the time of year and stocks, while the quarterly survey also covers imports, selling prices, numbers employed, investment and business situation. Both monthly and quarterly surveys now contain questions on current and expected internet sales and average prices for internet goods.

This survey is a leading indicator of consumer spending because retailer and wholesaler sales are directly influenced by consumer buying levels. The monthly update provides a vital update on volume of sales, orders and stocks. Like the industrial survey, it carries significant weight in the formulation of economic policy at the Bank of England and within government as a highly respected barometer of high street trade. It is considered to be an advance indicator of retail sales although it is not well correlated with the official data on a monthly basis.

Monthly and quarterly